McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .
Chapters
| 1. |
Largest Life Insurance Company in India is: |
| A. | The New India Assurance Company Limited |
| B. | Life Insurance Corporation of India (LIC) |
| C. | United India Insurance Company Limited |
| D. | National Insurance Company Limited |
| Answer» B. Life Insurance Corporation of India (LIC) | |
| 2. |
The term risk may be defined as: |
| A. | The possibility of adverse results flowing from any occurrence. |
| B. | The possibility of an outcome being different from the expected one. |
| C. | Both a and b |
| D. | None of the above |
| Answer» C. Both a and b | |
| 3. |
Risk of premature death is a |
| A. | Financial risk |
| B. | Personal risk |
| C. | Dynamic risk |
| D. | Subjective risk |
| Answer» B. Personal risk | |
| 4. |
Insurance is a risk management technique involving: |
| A. | Risk retention |
| B. | Risk avoidance |
| C. | Loss control |
| D. | Risk transfer |
| Answer» D. Risk transfer | |
| 5. |
Organisations are mainly concerned with managing |
| A. | Pure risks |
| B. | Speculative risks |
| C. | Personal risks |
| D. | None of the above |
| Answer» A. Pure risks | |
| 6. |
The first step in risk management process is |
| A. | Risk avoidance |
| B. | Risk identification |
| C. | Insurance |
| D. | Risk evaluation |
| Answer» D. Risk evaluation | |
| 7. |
Main emphasis of risk management is on ___________. |
| A. | Risk retention |
| B. | Reduction of cost of handling risk |
| C. | Risk transfer |
| D. | all |
| Answer» B. Reduction of cost of handling risk | |
| 8. |
Cost of loss control is |
| A. | cost of reducing frequency and severity of loss |
| B. | cost of paying workers compensation |
| C. | cost of self-insurance |
| D. | all |
| Answer» A. cost of reducing frequency and severity of loss | |
| 9. |
Following are the risk management methods: |
| A. | Insurance |
| B. | Hedging |
| C. | Derivatives |
| D. | All of the above |
| Answer» D. All of the above | |
| 10. |
Which of the following types of risks best meets the requirements for being insurable by private insurers? |
| A. | Market risks |
| B. | Property risks |
| C. | Financial risks |
| D. | Political risks |
| Answer» B. Property risks | |
| 11. |
All of the following are financial risks which may be faced by business organizations EXCEPT |
| A. | Interest rate risk. |
| B. | Commodity price risk. |
| C. | Product liability risk. |
| D. | Currency exchange rate risk. |
| Answer» C. Product liability risk. | |
| 12. |
Risk management follows a systematic process which involves……….steps. |
| A. | Two |
| B. | Three |
| C. | Four |
| D. | Five |
| Answer» D. Five | |
| 13. |
Risk management information system is not useful in one of the following |
| A. | Reporting |
| B. | Hedging |
| C. | Claim adjustment process review |
| D. | none |
| Answer» B. Hedging | |
| 14. |
Event of high frequency and low severity fall in the self-retention category |
| A. | True |
| B. | False |
| C. | none |
| D. | all |
| Answer» A. True | |
| 15. |
When as event is stated to be possible, it has a probability between |
| A. | Zero and one |
| B. | Zero or one |
| C. | None of these |
| D. | Both of the above |
| Answer» A. Zero and one | |
| 16. |
If the most impossible event is assigned a value of zero, then most inevitable event is assigned a value |
| A. | Of one |
| B. | Between zero and one |
| C. | Between zero to 10 |
| D. | Between 10 to 100 |
| Answer» D. Between 10 to 100 | |
| 17. |
Which of the statement are true? A. Risk retention and risk transfer are some of the techniques to manage risks. B. Implementation is one of the steps in risk management |
| A. | Statement A. |
| B. | Statement B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» C. Both the statements | |
| 18. |
Which of the statements are true? A. Loss prevention and loss reduction mean different things. B. Risk maybe transferred by contract. |
| A. | Statement A. |
| B. | Statement B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» B. Statement B. | |
| 19. |
Which of the statements is correct? A. The simplest way to deal with a risk is to avoid it. B. This technique is always possible and practical. |
| A. | Statement A. |
| B. | Statement B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» D. Neither of the statements | |
| 20. |
Which of the statements is correct?
|
| A. | Statement A. |
| B. | Statement B. |
| C. | Both the statements |
| D. | Neither of the statements |
| Answer» C. Both the statements | |
| 21. |
When should a risk be avoided? |
| A. | When the risk event has a low probability of occurrence and low impact |
| B. | When the risk event is unacceptable -- generally one with a very high probability of Occurrence and high impact |
| C. | When it can be transferred by purchasing insurance |
| D. | A risk event can never be avoided |
| Answer» B. When the risk event is unacceptable -- generally one with a very high probability of Occurrence and high impact | |
| 22. |
Risk management can be defined as the art and science of _________ risk factors throughout the life cycle of a project. |
| A. | Researching, reviewing, and acting on |
| B. | Identifying, analyzing, and responding to |
| C. | Reviewing, monitoring, and managing |
| D. | Identifying, reviewing, and avoiding |
| Answer» A. Researching, reviewing, and acting on | |
| 23. |
When a firm buys insurance to cover losses caused by riots, the firm is |
| A. | Transferring risk. |
| B. | Avoiding risk. |
| C. | Assuming risk. |
| D. | Reducing risk. |
| Answer» A. Transferring risk. | |
| 24. |
Suppose a project has many hazards that could easily injure one or more persons and there is no method of avoiding the potential for damages. The project manager should consider __________ as a means of deflecting the risk. |
| A. | Abandoning the project |
| B. | Buying insurance for personal bodily injury |
| C. | Establishing a contingency fund |
| D. | Establishing a management reserve |
| Answer» B. Buying insurance for personal bodily injury | |
| 25. |
The cause of loss or a contigency that may cause a loss is known as-------------- |
| A. | Hazard |
| B. | peril |
| C. | Risk |
| D. | Uncertainty |
| Answer» D. Uncertainty | |
| 26. |
Which of the following is the similarity between insurance and gambling: |
| A. | The amount of loss to be paid is known before hand. |
| B. | Promise to pay on the happening of the event |
| C. | Both the parties win on happening of an event. |
| D. | Both are enforceable at law. |
| Answer» A. The amount of loss to be paid is known before hand. | |
| 27. |
The business of insurance is related to protection of: |
| A. | savings |
| B. | status |
| C. | profits |
| D. | economic value of assets |
| Answer» D. economic value of assets | |
| 28. |
The concept of insurance is |
| A. | to share losses by many |
| B. | to make money out of death |
| C. | to earn interest |
| D. | to earn a status |
| Answer» A. to share losses by many | |
| 29. |
Insurance covers the risk of the most certain event - |
| A. | Death of a person |
| B. | protection of the childhood |
| C. | protection of old age |
| D. | all of the above |
| Answer» B. protection of the childhood | |
| 30. |
Insurance cover |
| A. | Protects assets |
| B. | prevents loss |
| C. | reduces the impact of loss |
| D. | insures immortality |
| Answer» C. reduces the impact of loss | |
| 31. |
The company doing insurance business is called: |
| A. | mutual funds |
| B. | non-banking firm |
| C. | banking company |
| D. | an insurance company |
| Answer» D. an insurance company | |
| 32. |
All of the following are disadvantages of using insurance EXCEPT |
| A. | There is an opportunity cost because premiums must be paid in advance. |
| B. | Considerable time and effort must be spent selecting and negotiating coverages. |
| C. | It results in considerable fluctuations in earnings after a loss occurs. |
| D. | Attitudes toward loss control may become lax. |
| Answer» C. It results in considerable fluctuations in earnings after a loss occurs. | |
| 33. |
All of the following can be classified as casualty insurance EXCEPT |
| A. | Marine insurance. |
| B. | General liability insurance. |
| C. | Workers compensation insurance. |
| D. | Burglary and theft insurance. |
| Answer» A. Marine insurance. | |
| 34. |
Insurance eliminates or decreases the uncertainty associated with occurrence of an event |
| A. | Correct |
| B. | Wrong |
| C. | Partially correct C. |
| D. | Totally misleading |
| Answer» C. Partially correct C. | |
| 35. |
The insurance plays a role in the economic development of the country in following ways: |
| A. | Release capital for new investments. |
| B. | The job potential increases |
| C. | Money collected is invested in infrastructure |
| D. | All of the above |
| Answer» D. All of the above | |
| 36. |
Insurance brokers are governed by |
| A. | Sale of Goods Act |
| B. | Agency Law |
| C. | IRDA Act. 1999 |
| D. | Mercantile Law |
| Answer» C. IRDA Act. 1999 | |
| 37. |
A reinsurance of insurance refers to ________. |
| A. | line. |
| B. | retention. |
| C. | retrocession. |
| D. | cession. |
| Answer» C. retrocession. | |
| 38. |
IRDA Act. 1999 defines insurance intermediary as one including also |
| A. | Insurance broker |
| B. | UTI Agent |
| C. | Sarpanch |
| D. | Medical Examiner |
| Answer» A. Insurance broker | |
| 39. |
Insurance reduces the extent of financial loss connected with uncertain events |
| A. | True |
| B. | False |
| C. | To the extent of insurance cover |
| D. | Does not reduce the loss at all |
| Answer» C. To the extent of insurance cover | |
| 40. |
The business of insurance is related to protection of |
| A. | Savings |
| B. | Status |
| C. | Profits |
| D. | Economic value of assets |
| Answer» D. Economic value of assets | |
| 41. |
Which of the following is the similarity between insurance and gambling? |
| A. | The amount of loss to be paid is known beforehand |
| B. | Promise to pay on the happening of an event |
| C. | Both the parties win on happening of an event |
| D. | Both are enforceable at law |
| Answer» A. The amount of loss to be paid is known beforehand | |
| 42. |
What is underwriting in Insurance ? |
| A. | Process of investing the premiums which insurance provider collect from insured parties. |
| B. | A claim arises on the occurrence of a specified event |
| C. | Process by which insurers select the risks to insure and decide how much in premiums to charge for |
| D. | The ratio of losses and expenses to premium |
| Answer» C. Process by which insurers select the risks to insure and decide how much in premiums to charge for | |
| 43. |
Insurance Sector in India is regulated by IRDA. What is full name of IRDA? |
| A. | Insurance Regulating and Development Agency |
| B. | Insurance Rules and Development Authority |
| C. | Insurance Rules and Deployment Authority |
| D. | Insurance Regulatory and Development Authority |
| Answer» D. Insurance Regulatory and Development Authority | |
| 44. |
When was IRDA Act passed? |
| A. | 1972 |
| B. | 1999 |
| C. | 1989 |
| D. | 2000 |
| Answer» A. 1972 | |
| 45. |
Which of the following is the main objective of IRDA: |
| A. | To take care of the policy holder interest |
| B. | To open the insurance sector for private sectors |
| C. | To supervise the activities of intermediaries |
| D. | All of above |
| Answer» A. To take care of the policy holder interest | |
| 46. |
The general insurance business in India was nationalized in the year. |
| A. | 1976 |
| B. | 1956 |
| C. | 1983 |
| D. | 1972 |
| Answer» D. 1972 | |
| 47. |
The main role of an underwriter in a non-life insurance company is normally to |
| A. | assess the acceptability of particular risks |
| B. | certify a loss when claims are submitted. |
| C. | design the structure of the products to be offered. |
| D. | negotiate with the industry regulator. |
| Answer» A. assess the acceptability of particular risks | |
| 48. |
Akshat is a relatively cautious person. In insurance terms, this will normally increase the likelihood that he will |
| A. | be considered an above average insurance risk. |
| B. | be considered a below average insurance risk. |
| C. | require insurance cover. |
| D. | require reinsurance cover. |
| Answer» C. require insurance cover. | |
| 49. |
Which of the statements is correct? A. Insurance is a transfer of risk mechanism. B. Insurance gives physical protection to assets. |
| A. | Statement A. |
| B. | Statement B. |
| C. | Both the statements. |
| D. | Neither of the statements |
| Answer» A. Statement A. | |
| 50. |
Transfer of rights and remedies of the insured to the insurer after indemnity has been effected is called __________. |
| A. | Insurable interest. |
| B. | Subrogation |
| C. | Proximate clause. |
| D. | Money back policy. |
| Answer» B. Subrogation | |
Done Studing? Take A Test.
Great job completing your study session! Now it's time to put your knowledge to the test. Challenge yourself, see how much you've learned, and identify areas for improvement. Don’t worry, this is all part of the journey to mastery. Ready for the next step? Take a quiz to solidify what you've just studied.